Relation Analysis Between REITs and Construction Business, Real Estate Business, and Stock Market

Lee, Chi-Joo; Lee, Ghang

doi:10.6106/kjcem.2010.11.5.41

Cited by 5 publications

(1 citation statement)

References 1 publication

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“…Cho and Kim (2011) confirm that while REITs are less sensitive to general stock market fluctuations, they are highly influenced by variables related to bond and real estate markets. Lee and Lee (2010) analysed the relationship between REITs and the construction industry, real estate and stock markets from two perspectives. First, to analyse the correlation between the stock market and REITs, they analysed the relationship between changes in REIT stock prices and changes in the KOSPI construction industry index.…”

Section: Literature Reviewmentioning

confidence: 99%

COVID-19 and the daily rate of return of three major industry sector stock price indices related to real estate

Min

Shin

Paz

2021

JPIF

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PurposeThis paper analyzes how three major industrial stock indices related to South Korean real estate industries are affected by the exogenous shock of the measures taken to control COVID-19, coupled with investor sentiment, which has global impacts.Design/methodology/approachThe paper uses daily stock market indices on three major stock price indices: construction industry sector index, real estate operating company (REOC) industry index and the real estate investment trust (REIT) industry index of the Korea Stock Exchange (KRX), from January 8, 2020, when the World Health Organization (WHO) began to issue official indicators regarding COVID-19, to March 27, 2020, the last trading day of the week during which the South Korean government's stock market stabilisation fund was launched.FindingsResults indicate the REIT sector's stock rate of return to be relatively less sensitive to impacts of COVID-19 compared to those of the two other indices. Impulse response analysis also shows similar results. Impulse response estimations indicate that earlier information of REITs has prominent significance in explaining changes in the time series process itself. Similar to findings of prior studies that have been conducted with long-term perspectives, results of our short-term study indicate that the medium-risk, medium-return characteristic of the real estate industry has significance even in short-term perspectives.Practical implicationsREITs can be an investment vehicle that provides strong benefits of diversified investment for mutual fund investment managers even in the case of short-term exogenous market disruptions.Originality/valueThe analysis run in the empirical exercise is the first to consider the sensibility between international stock exchanges to the effects of measures taken to control COVID-19 impact.

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Section: Literature Reviewmentioning

confidence: 99%

COVID-19 and the daily rate of return of three major industry sector stock price indices related to real estate

Min

Shin

Paz

2021

JPIF

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Analysis on the Change Pattern and Dynamic Characteristics of Location Centrality in K-REITs’ Underlying Assets Using the Spatial Statistical Model

Song¹,

Yun²,

Nam³

2021

jkpa

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An empirical study on the short-term effects of economic sentiment on the direct and indirect investment markets in real estate

Hahn¹,

Kang²

2023

J. Hous. Urban Finance

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This paper aims to investigate the short-term effects of economic sentiment on both direct and indirect investment markets in the real estate sector. The analysis employs the vector-autoregression, Granger causality, and variance decomposition approaches using monthly returns on the Economic News Sentiment Index, Real Estate Sentiment Index, REITs Infrastructure Index, and Apartment Price Index. The findings indicate that the economic and real estate consumer sentiments have predictive capabilities for both the REITs Infrastructure Index in the indirect real estate investment market and the actual transaction price index of apartments in the direct real estate investment market. This implies that the Economic and Real Estate Consumer Sentiment Index contain valuable information for predicting real estate market prices and can be helpful for policy-making in both markets. While the Real Estate Consumer Sentiment Index is helpful in predicting direct real estate market prices, it does not precede prices in the indirect real estate investment market. In the direct real estate investment market, the actual transaction price of Seoul apartments demonstrates predictive power for the Busan Apartment Price Index.

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Relation Analysis Between REITs and Construction Business, Real Estate Business, and Stock Market

Cited by 5 publications

References 1 publication

COVID-19 and the daily rate of return of three major industry sector stock price indices related to real estate

COVID-19 and the daily rate of return of three major industry sector stock price indices related to real estate

Analysis on the Change Pattern and Dynamic Characteristics of Location Centrality in K-REITs’ Underlying Assets Using the Spatial Statistical Model

An empirical study on the short-term effects of economic sentiment on the direct and indirect investment markets in real estate

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